In a surprising move, the National Association of Securities Dealers (NASD) has reversed its rule banning the use of negative response letters for the bulk transfer of client accounts when a rep switches broker/dealers.
The Financial Planning Association’s Washington office played a key role in convincing the NASD to reserve its decision. The “hero” is the FPA, says Neal Solomon, president of Solomon Associates in Gloversville, New York. Solomon, who serves on the FPA’s government relations committee, is in the process of switching broker/dealers. When he realized how costly it would be to comply with the NASD’s rule banning the use of negative response letters, which was passed in October, Solomon contacted the FPA. Neil Simon, a member of the FPA’s Washington office, and Solomon promptly set up a meeting with the NASD’s general counsel to discuss the rule.